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A business plan is a document where you describe the different characteristics of your business and your action plan to achieve goals or face unexpected situations.
If you are a freelance graphic designer, having a business plan will also help you define what products or services you offer and to which audience your offer is directed.
If you want to turn your freelance career into something professional, making a business plan is essential.
Who Needs a Freelance Business Plan?
Contrary to what some freelancers imagine, developing a business plan is less complicated than it seems.
Business plans are ideal for those freelancers who want to make changes in their work to earn more money, want to have a stable financial situation, or who want to grow their freelance career.
There are many reasons to develop this strategy and if you are not completely convinced, the important thing is that you keep in mind that developing your business plan will bring many benefits to your career as a graphic designer.
One of the main benefits of a business plan is that it allows you to know the viability and profitability of a business before starting it and thus, for example, save time and money in case the business is not viable or profitable.
Imagine that as a graphic designer you choose to focus on the logo design niche, but in your area or community, there are already many logo designers.
This can affect your chances of finding clients, but if you draw up a business plan you can establish targeting another type of audience where you will find clients or change your niche and specialize in another area.
A business plan also serves as a guide to starting a business and operating it for a couple of months to see if it works.
When you start a business without previously making a business plan, you make decisions along the way, which generally makes starting the business and mastering its operation take longer than it would have taken if you had previously made the plan.
Instead, by making a business plan you know the steps you must follow to start the business and then how to operate it, which generally allows you to be more efficient, reduce uncertainty and minimize the risk of making mistakes or failure.
In fact, 17% of small businesses fail because they lack a business model, this means that many freelancers do not take the time to treat their jobs seriously and sadly end up losing all their effort by not following any guidelines
Aim of a Freelance Business Plan
It is often thought that a business plan is something that only belongs to large companies; but the truth is that regardless of whether it is a large company or a novice freelancer, the development of a business plan is a stage that every freelancer must go through.
Having a business plan has different aims that are extremely helpful, especially nowadays where due to the great existing competition, the chances of starting a new business are challenging.
1. Helps You Stay Focused
Having a plan in place is perfect for those times when you do not know what to do. In this way you can prioritize your short and long-term goals, what are those things that you should take care of before others.
When you are a freelance graphic designer, it is normal to let things go at their own pace, but when something unforeseen happens like a client who decides to end your work relationship, that is when you find yourself in trouble because you do not have any action plan.
If you set a business plan you will be focused on making your freelance career grow and will have a better idea of how to approach and achieve your goals.
Without it, you are more prone to making mistakes, wasting time, investing your effort in activities that you consider valuable but that in the end do not contribute anything significant to your growth as a professional.
Every freelancer has difficult and uncertain days, where you do not know how you will pay your bills or how to get new clients.
A business plan will keep you stable on days when you do not have so much activity, it will tell you what steps to take and where to direct your business so that you can be more successful.
2. Gives Control Over Your Freelance Business
Are you one of those who has a hard time taking the helm of your business?
Do you feel that you are not always in control of what happens day to day, activity by activity, process by process?
Do not be overwhelmed, you can take the helm if you establish an order, a system that allows you to be in control.
Your business plan can be a representation of the model that you will follow to carry out all your business relationships.
Basically it will be a graphic structuring of what the business is or will have to be and this will give you more control over it.
First, you must establish the goals of what you want to control, that is, establish the different areas of your company where you want to establish control and define the results you want to achieve.
By keeping track of everything you do in your business, you will notice those things that are not working and what you need to change.
3. Helps You Get Financing
Finally, when looking for financing, a business plan allows you to demonstrate to third parties the viability and attractiveness of your freelance business and therefore, helps you to get it.
Financing is useful in case you do not have enough money but you need to renew your work equipment or acquire a new one.
In case you want to obtain a loan, it allows you to demonstrate to a bank, financial institution, or lender that the business is profitable and that you will be able to pay the debt contracted on time, and thus convince them to grant it to you.
Also, when looking for a partner or investor, the business plan allows you to demonstrate to potential partners or investors the attractiveness of the business (for example, by pointing out the differentiating characteristics, strategies, experience, profitability, etc.) and so on. It convinces them to partner or invest with you.
4. Allows You to Know the Viability and Profitability of a Business
One of the main benefits of a business plan is that it allows you to know the viability and profitability of a project before starting it, and thus, for example, save time and money in case the business is not viable or profitable.
This is a point that many freelancers are afraid to touch, but the stark reality is that 50% of small businesses fail in their first year, so you should consider everything in your power to prevent this from happening.
Imagine that a client offers you a job proposal with a payment that sounds attractive but does not convince you at all.
If you compare this job offer with your business plan, you can see if the time and effort that you will dedicate to this job is feasible according to the goals you have set for yourself.
With the help of your business plan, you will see if after 6 months if this job is worth it or not.
Remember that your business plan will include the calculation of the income and expenses in which you will incur and also the calculations of any detailed investment that you will need to maintain your business.
These investments can be such as computers or technological equipment, training, payment of software.
Your plan also should include how you will bear the expenses, especially until you achieve enough income to support yourself.
Business Plan Fundamentals
Your business plan is a customizable document, especially because a business plan for a company is not the same as for a freelance graphic designer.
However, there are several elements that you cannot ignore if you want to create a useful and effective plan.
1. Executive Summary
It is a summary of the most important points of the other parts of the business plan, so ideally it should be written after the other parts have been completed.
The purpose of the executive summary is to give the reader a general and succinct vision of the business plan, so everyone can understand in a single reading what the business consists of and generate interest in them for the plan and for deepening in the reading of the others parts.
The executive summary must be effectively a summary because its function is to clearly explain what your business consists of, no matter how complex it may be, and to be able to generate interest in the plan and invite its reading (for example, using positive language and highlighting the factors that demonstrate the viability of the business).
2. The Identity of Your Business
After the executive summary, the next part or section of the business plan is the definition of the business, telling who you are and what you do.
This part describes the business you do, what you specialize in, as well as basic aspects related to it. The objective of this section is for the reader to know what your work consists of.
It is also good to include a description of the services you perform. At this point, you can explain how your business or service works, what are the products you offer, and what will be its main characteristics or benefits.
The degree of detail in the business description will depend on the type of business and the objectives of the plan.
If you consider it appropriate, you could include here, for example, some images of the services you have offered as a graphic designer, so you can give a better description.
3. Market Study
The market study describes aspects related to the market in which the business will operate, such as the target market to which it will be directed, and the competition it will have.
The objective of the market study is to show the reader relevant information about your target and to indicate how that information will be used for your benefit.
Why is it so important to know your market?
This will help you to know how profitable the service you offer is within the target you want to manage.
42% of small businesses fail because they do not have enough demand in the market, so if you take the time to do your research first, you will be able to know if your target is feasible or if you need to make a change to avoid losses.
Keep in mind that to carry out this part it may be necessary to previously carry out a market study that allows you to collect and analyze market information.
That does not have to be a difficult task either since it could only consist of building your ideal client and according to that, give an idea of what the market you want to focus on is like.
Your target market is that group of people who you consider to be ideal for hiring your services as a graphic designer.
Every freelancer must always define its target market since this allows them to specialize and focus on a certain type of consumer and thus achieve greater efficiency than it would be if they addressed all the consumers that exist.
Also, being clear about your market will make your business grow exponentially.
Incredibly, 47% of businesses consider it necessary to invest in this specific area since for them this is what has helped them the most to expand their influence.
Without a doubt, it is an aspect that you should not neglect if your goal is to grow and generate profits.
4. Technical Study
This part describes technical aspects related to your business, such as the physical requirements necessary for its operation and its production process.
As a graphic designer, you will know that this part is very important since you use many types of technological equipment to carry out your work.
Here you must make a list of all the equipment that is necessary for you to work. Computers, iPad or graphic tablet, pencil for your tablet, printer, or also drawing tools such as specialized pencils, blocks, or notebooks.
Do not forget to include the digital tools you use, such as illustration software.
All that you include in this list are your work assets and having this clear will help you to quote projects for your clients and also to put a value on your business.
This will also help you get an idea of the earnings your work has generated and what you have invested or should invest in.
5. Financial Projection
In this section, you evaluate the current income and expenses and an estimate is made of the income and expenses that the business will have for the period in which the business plan is projected.
The time in which a business plan is projected usually depends on the type of business and the objectives of the plan, but to begin with, you could do it from six months to a year.
The objective of the study of income and expenses is to show you or a funder the income and expenses that the business will have, as well as the relationship between them.
Knowing the future income and expenses of the business will allow you to know to a large extent if the business is viable or not.
It will be viable when future income is greater than future expenses and it will not be viable when future expenses are greater than future income).
Here you can also include a financial evaluation to demonstrate that the business is profitable, in how long the investment will be recovered and how much is expected to be obtained for it.
The appendix is an optional part that includes documents that provide additional information and that are included at the end of the business plan in order not to overload the main part and end up making it difficult to read.
If you are putting together your business plan to show it to someone else to get financing or an alliance including this part is a very good idea.
Here you can show work you have done, what is your style and graphic line, what types of services you offer, but also everything that supports the information you included in your business plan.
Here is a list of things you could include:
- Images of the products you offer.
- Images of your work assets.
- Your CV.
- Agreements with partners.
Tips and Advice to Keep in Mind
There is no mandatory way to put together your business plan, but you must do it according to your needs and purposes.
For example, if you do not plan to use your business plan to obtain financing, you can exclude some points from the financial projection.
Anyway, here are some recommendations that will help you whatever your intention is.
Plan Something That Will Be Realistic for You to Follow
Creating your business plan can be both exciting and scary. But for both cases, you want to make sure you set realistic goals that you can achieve.
By setting your goals, you will be challenging yourself to get out of your comfort zone and work hard to achieve what you set out to do.
Likewise, you should not push yourself too hard, especially if you are just starting out.
What makes you a quality freelancer is being consistent with your projects. Realistic goals will keep you motivated as you will see how little by little you get closer to what you have proposed.
Achieving them will show you that you are capable of big projects, so setting goals is essential if you want to grow professionally as a freelancer.
It is Adjustable
Your business plan does not have to look perfect or strictly professional, but it is a guide and you can make the changes you consider necessary.
It is likely that today you will establish some goals in your plan, but that after three months you decide to change your niche or target and also the goals, then it is totally valid to adjust your business plan to your new ideas.
However, the recommendation is that you change it only when necessary.
If you see that due to some mistakes you have made or due to some eventuality one of your goals is impossible to achieve in the time you stipulated, your business plan will be of great help to understand what you are doing wrong and what you must change to make your goal something possible again.
Short Goals Help Achieve the Long Term Goals
Taking small steps to reach a big goal is the best way to really achieve it.
Do not doubt that doing so will help you achieve great results in a short time and take your freelance career to a better level.
If you set small goals such as generating a certain amount of money at the end of the month or acquiring two new clients at a certain time, you can achieve much larger goals such as consolidating a large group of clients or raising a certain amount of money to invest in new work teams.
Taking small steps towards a big goal will not only help you have better personal finances, save and invest but it is such an effective method that it will work for any goal you set for yourself.
Stop Being a Newbie and Become a Pro
Having a business plan is something that will boost your freelance career and what distinguishes newbies from professionals.
If you want to turn graphic design into your career and a steady job, you should treat it as a business.
Remember that making your business plan should not be complicated and that it can vary a lot depending on your objectives or purpose.
However, what you should take into account is the executive summary, the identity of your business, a market and technical study and of course a financial projection.
With this being said, you are now on the track to take your freelance career onto the next level.